Gold bees are a different and unique form of ETFs in India, which are traded on a large scale and represent a specific value of gold. A single unit of gold bee is approximately equivalent to 0.01 gram of gold. Gold bees offer a convenient, cost-effective, and secure way to invest in gold.
Investing in gold bees offers a seamless opportunity for trading and eliminates the need to store or buy gold in physical form. These are regulated by SEBI and traded on the Bombay Stock Exchange and the National Stock Exchange. Let’s see how gold bees work, the benefits of investing in them, and how they differ from gold ETFs.
How Does Gold Bees Works?
A fund manager, after checking their purity and international standard marking, buys gold in the form of coins and bars. Each coin represents 1 gram of gold. Investors, after considering market risks and variations, bought and sold these gold coins or bars in exchange funds. The gold bees represent the present value of the gold, and to convert it into cash, management and trading costs are subtracted from it.
Gold bees offer a transparent and efficient way for traders to own a sufficient amount of gold without the hassle of storing it physically with advanced safety.
Benefits of Investing in Gold Bees
Investing in gold bees is just like trading with any other asset, but with different regulations, risks, and opportunities. With Gold bees investor can diversify their portfolio, keep it for a long period and maximise savings. The other key benefits of investing in gold bees include the following:
1. High Liquidity
Gold bees offer high liquidity to investors. It allows them to buy or sell any number of units anytime during the trading hours. They ensure that the investor has enough opportunity to quickly respond to price fluctuations or changes in the market, thereby reducing investment risks. This key benefit offered by gold bees makes them ideal for short-term and long-term investments.
2. Cost Effectiveness
When compared to the price of actual gold, Gold bees are ideal and more economical. When you buy physical gold in the market in the form of ornaments or a specific design, there are added costs in the form of storage fees, making charges, and insurance. But with gold bees, the expense ratio is comparatively low, and no additional costs are involved. This offers a greater scope to trade in gold without compromising their savings to buy actual gold.
3. Secure Transactions
Investment in gold bees is not prone to theft or any other damage, unlike the case with buying actual gold. Gold bees offer enhanced investment safety as all of their transactions are regulated by the guidelines and regulations of the stock exchange. If you have a Demat account, you can safely manage your savings and maintain a gold reserve with you.
4. Flexibility to Purchase in Small Quantities
Another key benefit of gold bees is that it allows investors to purchase gold in small quantities or units. The investment requirement in purchasing gold bees is quite low as compared to the investment outlay for acquiring actual gold. With gold bees investor can purchase a small amount of gold from time to time until it converts into a huge gold reserve.
An Overview of Gold ETFs
Gold ETFs are another category of fund that involves trading in gold units and reflect the different price of each unit fluctuates by market conditions. It sounds similar to Gold bees; however, there is a huge difference between the two. Gold bees are a different type of Gold ETF.
Gold ETFs are offered by various Asset Management Companies in India. Below is the list of the best gold ETFs in India.
Best Gold EFTs in India in 2025
| Fund Name | AUM (Rs. Cr.) | 1Y Return (%) | 3Y Return (%) | Expense Ratio(%) |
|---|---|---|---|---|
| ICICI Prudential Gold ETF | 5531.3 | 21.12 | 14.01 | 0.50 |
| Birla Sun Life Gold ETF | 972.1 | 20.98 | 13.94 | 0.54 |
| Kotak Gold ETF | 4911.1 | 20.93 | 13.97 | 0.55 |
| LIC MF Gold ETF | 172.3 | 20.67 | 14.3 | 0.41 |
| UTI Gold ETF | 1520.1 | 20.67 | 13.9 | 0.47 |
| Invesco India Gold ETF | 125 | 20.45 | 13.95 | 0.55 |
| SBI Gold ETF | 5977.7 | 20.4 | 13.85 | 0.65 |
| Axis Gold ETF | 1068.1 | 20.74 | 14.03 | 0.54 |
| HDFC Gold ETF | 6615.4 | 20.48 | 13.73 | 0.59 |
Gold Bees vs Gold EFTs: What’s the Key Difference?
Gold bees are a distinct and different type of gold ETF, but for taxation purposes, both are treated the same. However, the key difference between the two includes:
| Basis of Difference | Gold Bees | Gold ETFs |
|---|---|---|
| Category | Gold Bees, offered by Nippon India Mutual Fund, is a specific and particular kind of gold exchange-traded fund | Offered by several fund houses, and is a broader category of exchange-traded fund |
| Fund Houses | Nippon India Mutual Fund | HDFC, Kotak, ICICI, Axis, and many other AMCs |
| Unit Size | Each unit represents a value equivalent to 0.01 gram of gold | Each gold ETFs represent varied values depending on the market factor and prices |
| Liquidity | Highly liquid | Depends on the AMCs which offered gold ETFs and trading activities |
| Expense Ratio | Fixed ratio of 0.8% | Fluctuating ratio usually ranges between 0.32% – 0.78% |
Final Thoughts
Gold bees are a different kind of investment category in which, rather than trading in stocks, debt instruments, or other assets, investors buy or sell gold units. Each gold unit represents either a fixed or a different amount, which is equivalent to the value of actual physical gold. Trading in gold bees or gold ETFs offers a greater flexibility to investors to buy a small amount of gold. However, there are certain market risks that investors need to take care of to avoid sudden surprises.
Frequently Asked Questions
1. What is the general rule for taxation of Gold Bees and Gold ETFs?
For Gold bees and Gold ETFs taxation, the following rules are generally applied:
Short-term gain (held less than 12 months) – taxed as per tax slabs
Long-term gains (held for over 12 months) – 12.5% fixed tax rate
2. Is investing in Gold bees and Gold ETFs good for all investors?
Not necessarily. It is usually considered that investing in Gold bees and Gold ETFs is good for long-term investors looking for safe ways to cope with inflation or currency fluctuations, or beginners who wish to invest a relatively small amount in gold.
3. Can you invest in Gold bees or Gold ETFs without a Demat account?
No, to invest your savings in Gold bees or Gold ETFs, you must have a registered and working Demat account.
4. Which trading fund is good for beginners – Gold EFTs or Gold bees?
For beginners, Gold bees are a more secure and affordable option with comparatively low investment risks.